61–70 of 164 posts
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American Imperialism at its finest. "Since we're the best country in the world, you couldn't have possibly become rich without us, and therefore you must pay to leave us!"
Greatness aside, you probably couldn't have become rich without roads, national defense, clean water...
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And the US double taxes their citizens living abroad the same way. As an American making the same money as your non-american co-worker you are left with a lot less just for having a US passport. It is even possible you have never set foot in the US yet are required to pay uncle sam's taxes. Wanna get rid of your US passport? Not before you pay 10 years projected taxes and pay an abhorrent fee. You will also be listed…
While I agree, there are a lot of problems with the tax system for ex-pats, and I would love some reform being an ex-pat myself, it's not clear to me why citizens shouldn't be double taxed. Sure, for some things (national funding for roads, schools, etc...), ex-pats may receive no benefit. But 53% of US discretionary spending is military spending. In what way does the US military provide more service to resident citi…
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And the US double taxes their citizens living abroad the same way. As an American making the same money as your non-american co-worker you are left with a lot less just for having a US passport. It is even possible you have never set foot in the US yet are required to pay uncle sam's taxes. Wanna get rid of your US passport? Not before you pay 10 years projected taxes and pay an abhorrent fee. You will also be listed…
While I agree, there are a lot of problems with the tax system for ex-pats, and I would love some reform being an ex-pat myself, it's not clear to me why citizens shouldn't be double taxed. Sure, for some things (national funding for roads, schools, etc...), ex-pats may receive no benefit. But 53% of US discretionary spending is military spending. In what way does the US military provide more service to resident citi…
"Discretionary spending" is a term the left made up to lie about how much of the budget is things they want. Things they want are non-discretionary, other things are discretionary. It's political newspeak, not a comprehensible way to measure the government budget.
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That's not double-taxation if the US has a tax treaty with the other nation (which is does with most nations). You get tax credits for foreign income taxes paid such that you pay max(foreign_tax, us_tax).
(IANATA) If you get tax credits, wouldn't you pay us_tax-foreign_tax if us_tax>foreign_tax ?
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Also, the US has one of the highest corporate tax rates in the world. If you can go to Ireland and pay something close to 10%, its a no brainier. The tax rates are pretty crazy in the US if you think about it. A single person small business just getting started still has to pay 33% of their profit even if their profit is $1,000 for the entire year.
Corporate tax in the US is like your personal income tax. The rate is kinda bullshit because you get so many deductions and exclusions. The term you're looking for is "effective tax." For US corporations it was 12.6% according to the GAO in 2010: http://money.cnn.com/2013/07/01/news/economy/corporate-tax-r...
Earlier quoted context omitted.
And the US double taxes their citizens living abroad the same way. As an American making the same money as your non-american co-worker you are left with a lot less just for having a US passport. It is even possible you have never set foot in the US yet are required to pay uncle sam's taxes. Wanna get rid of your US passport? Not before you pay 10 years projected taxes and pay an abhorrent fee. You will also be listed…
> And the US double taxes their citizens living abroad the same way. The tax code has provisions to avoid "double taxes" on foreign income. You file Form 1116 to claim credit for taxes you paid to a foreign country as an offset against your U.S. tax liability.[1] That tax credit is separate from the income exclusion, which excludes the first ~$100k of foreign income from U.S. taxation. Generally, your total tax liabi…
Just jumping in here to voice my appreciation for you & @kspaans correcting a highly voted comment but very incorrect assertion, which is a dangerous combination because some people only read the first few comments and leave with that falsehood impressioned as fact.
Responding with a factual source and doing so in a graceful manner (i.e. not disrespecting the poster, but gently correcting them) is what makes HN great.
Meta-meta-comment: I've seen your posts for well over half a decade and you remark consistently with the quality of StravosK, patio11, grellas, pjmlp, et al. Never clicked on your profile but you're an engineer-turned-attorney, so that's from where the rigor and @grellas vibe originates. Anyways, thought I'd take the moment to say "hey, insightful stuff, keep it up.")
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American Imperialism at its finest. "Since we're the best country in the world, you couldn't have possibly become rich without us, and therefore you must pay to leave us!"
You're intentionally blowing the parent's comment dramatically out of proportion to what was actually said, as a cheap excuse to bash America. The parent never proclaimed America was the best in any regard, nor hinted at such an attitude. Nobody needs to think their country is the best just to implement negative tax policies. All it indicates at a base level is the desire to maximize tax revenue. That goes for countr…
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Also, the US has one of the highest corporate tax rates in the world. If you can go to Ireland and pay something close to 10%, its a no brainier. The tax rates are pretty crazy in the US if you think about it. A single person small business just getting started still has to pay 33% of their profit even if their profit is $1,000 for the entire year.
Corporate tax in the US is like your personal income tax. The rate is kinda bullshit because you get so many deductions and exclusions. The term you're looking for is "effective tax." For US corporations it was 12.6% according to the GAO in 2010: http://money.cnn.com/2013/07/01/news/economy/corporate-tax-r...
Put another way, the low effective rate doesn't disprove that 35% is too high--it demonstrates the effect of having such a high nominal rate.
It would be better to have a competitive nominal rate. Then companies would move their capital based on business, not tax, reasons.
For example, the U.S. tax rate provides an incentive for overseas manufacturing. If Apple moves capital from Ireland to China to invest in a new Foxconn factory, they pay a lower tax rate than if they moved the same amount of capital from Ireland to Texas to invest in a new factory there. Even if all the business costs were same between China and Texas, China would win on the tax costs.
It's an impediment to bringing more manufacturing jobs back to the U.S., and a one-time tax holiday will not solve it. The rate needs to be permanently lowered. Unfortunately the people most upset about the decline of U.S. manufacturing jobs tend to see the corporate tax rate as a tool of justice, and therefore reject lowering the rate on principle.
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But it is. If I earn $120k in let's say the Netherlands, I pay NL taxes on all of it and US taxes on about $20k of it. I'm getting double-taxed on the amount over $100k. (Nice round numbers might not be accurate, but the idea is still there.)
That's why you claim a foreign tax credit on those income taxes you paid in NL. If NL charges less income tax than you'd be charged in the US, then your tax credits will reduce your taxable income to, say, $20k like you mentioned. But this isn't double taxation because you are only be charged tax to top up the amount of tax you pay to be in line with US income taxes. This is exactly like state income taxes. It's not…
Here's a simplified model to illustrate:
Wlog, suppose the US charges a straight m rate per dollar, country X charges n. Suppose first k dollars of an expat are untaxed by the US.
Let's say the expat makes j dollars, an equivalent US citizen in the US makes the same, and so too a citizen of X.
The citizen of X is taxed nj by X, the US citizen resident in the US is taxed mj, and the expat would be charged (j-k-nj)×m by the US and nj by X for a total of m(j-k-nj) + nj if it were a deduction to taxable income.
Notably if there's no fixed deduction, every tax rate causes you to pay more than otherwise.
This is happening because unlike almost every other developed nation the US has a worldwide tax system. Almost every other nation has a territorial tax system. The rest of the world with their territorial system taxes income earned within that country, the US rather taxes income worldwide, regardless of where it is earned. For example, if a British company earns income in Germany, its pays German taxes on its German…
I think this makes sense. If I live in the US and make some product and sell it in Germany, then whatever profit I bring home from Germany (less German taxes) is still an income that was effectively earned in the US, since I am living and working here. The business transactions occurred in Germany, but the income was 'earned' by my labor in the US.
From this point of view, a territorial tax system is a subsidy designed to make goods more competitive in foreign markets. (Since I don't have to pay taxes on foreign profits, I can lower the price I charge overseas.)